Rich man's problem!

[dividinde]

Over time, my wallet size starts to grow to a really large amount. As this size increases, the issue of security becomes more and more of a priority for me (I have more and more to lose).

About half of my investments are in a PostFinance account, the other half at Cornertrader. I still have some positions at Migros Bank and Swissquote, but nothing very significant.

I'm less and less comfortable with these two big accounts: If for example one of them were hacked, I could potentially lose half of my investments! (depending on the situation and responsibilities, I imagine that the bank would reimburse me at least in part, but I prefer not to have to count on that).

What do you think is the best way to better distribute this risk? How do you go about reducing this “concentration”?

– Open new accounts with other online banks? (while I am very satisfied with the platforms and fees of my two brokers).

– What about opening a 2nd or even 3rd account with the same broker? If I'm not mistaken, I'll have to access it with the same username and password, so if someone manages to hack my 1st account, they'll also have access to my 2nd?

– Other ideas?

THANKS!

[Jerome]

I wonder what the risk is of a hack. It seems to me that the security of bank and brokerage accounts is pretty robust. But it's a good question, and goes beyond the issue of spreading the risk across multiple accounts.

Regarding this last point, opening additional accounts with the same broker does not offer any additional security, neither in the event of hacking, nor in the event of the bank going bankrupt.

I would like to point out that in the event of bankruptcy, assets such as shares are the property of the client and not of the bank, unlike cash. Regarding the latter, it is however guaranteed up to CHF 100,000 in Switzerland, per establishment. In the USA, the SIPC offers a guarantee of USD 250,000. IB has also just launched a program that automatically distributes the cash across several banks, so as to potentially increase this guarantee to as much as 2.75 million dollars. So there is room for improvement…!

In short, I think that in all cases you should at least spread your assets across two institutions. Financial intermediaries all have their own qualities and defects. Having several allows you to use the best characteristics of each according to your needs. It also allows you to sleep more peacefully. On the other hand, I think that it becomes counterproductive to have too many because the taxation and management (cash transfers, or even securities) become more complex.

In your case I find that with 4 establishments you are already more than covered. Nothing prevents you from balancing a little more towards the two less provided establishments, in any case towards Swissquote, because given the prohibitive custody fees of the Migros bank I understand that you limit yourself to the least.

If there is a banking IT security expert around I would be happy to hear from him especially on the hacking issue.

[dividinde]

 

Thank you Jerome for your answer.

In the case of a "real" hack, where you did nothing wrong, I think the bank will reimburse without any problems. But if you have some responsibility (like: you entered your login details on your smartphone on the train and didn't notice that someone was looking over your shoulder, or you wrote your password on a piece of paper that you lost, etc.) it might be your fault.

The broker's bankruptcy does not scare me, since the shares are not their property and are ours anyway.

Two institutions are better than one, but the more my investments grow, the less comfortable I am with it. Swissquote and Migros Bank are rather youthful mistakes and no longer suit me, especially because of the custody fees. As a result, I really have almost nothing left there and I don't want to put more money there.

That's why I'm thinking about a third broker (it would be to inject new funds, not to transfer securities from another deposit), but I can't find one that I like as much as PostFinance and Corner. I'll keep digging on this side.

The site https://www.moneyland.ch/fr/trading-comparatif is quite comprehensive but not easy to use depending on all the different types of investor profiles that can be compared and one's own profile.

[Jerome]

I agree with you that the risk is low in the event of hacking for the customer, unless of course he commits a serious act of negligence.

I see you seem satisfied with Cornertrader. Can you tell us more about it? Strengths – weaknesses?

Are you limiting yourself to Swiss players? Have you not thought about Interactive Brokers?

[dividinde]

It is true that I have not focused on Swiss intermediaries so far, I should look at IB more closely.

I am indeed very satisfied with Cornertrader:

+ Brokerage fees are very low, especially once your deposit exceeds 75K: for Swiss stocks, 0.12% but minimum 18 CHF. So for example, for a position of 10,000 I pay 18 CHF, or 0.18%.

+ Free account opening. No custody/account maintenance fees (as long as you carry out at least one transaction per quarter).

+ Login etc. very easy and fast (I do almost everything via easy recognition on my iPhone).

+ Access to a huge number of markets and products.

+ You are assigned a personal advisor, whom I have already contacted several times by email or phone. Very satisfied with the information, always very fast and competent. When he is absent, someone else is always available.

– Opening an account: in order but still very laborious (form to fill out with a load of pages and sections).

– The platform is ok, but I prefer PostFinance, in my opinion more intuitive and easy to use (but brokerage fees are higher at PostFinance). In addition, from the App Corner I cannot generate PDF reports (like an overview of dividends received over a year).

– Most of the courses are given with a 15 minute delay. You would have to pay to have everything in live time, which I don't do because I already have real time with Swissquote.

Can you recommend IB to me?

[Jerome]

Thanks for this information about Cornertrader. Is it also possible to have a tax statement? If so, what is the price?

Is there also the Tokyo market?

Yes I recommend IB. It's hard to do better in terms of brokerage fees. No custody fees. This is valid for both trading and b&h.

There is however a system of minimum transactions per month to reach, failing which they charge you a small amount, but it is trifles, nothing compared to custody fees. Moreover it disappears as soon as your account is sufficiently funded.

Top security. The user interface on PC is a bit complex, but I only use the App, which already allows you to do a lot of things.

You can trade almost anything and everything in almost any country in the world. If you are daring you can short sell and use leverage by buying on margin.

In addition, opening and managing the account is quick and simple, entirely online.

[dividinde]

Thanks bro for this info, I will definitely take a closer look at IB!

About Corner:

– Yes, you can buy on the Tokyo Stock Exchange, but I don’t know if you can also trade small caps there. I also haven’t looked at what the brokerage fees are for Japan.

– Tax statement: Digital account statements are free of charge. The paper version costs a minimum of CHF 100 and a maximum of CHF 500.

[Jerome]

This is a bit of a problem with this tax statement: when you have several financial intermediaries, you accumulate costs.

With IB there are no worries though. No withholding tax and you can print your income and capital statement for free.

[Jerome]

I am testing the cornertrader platform, in any case it is nice. I do not find the Japanese market there, but it could be a good complement and a source of diversification to Postfinance. Thanks for the tip bro.

I guess you took the "capital" account?

[dividinde]

I had opened a "private" account, since I had started with zero CHF (new account, without transferring securities from another broker). Once your deposit has exceeded 75k, you automatically switch to the "capital" profile, with the advantages that go with it (notably lower brokerage fees).

PS: I can't read your last comment (or the others) under the article "Work less to earn more". Problem with the site or bug on my end?

[dividinde]

I find Japan in the Corner list:

Scholarships:
Australian Securities Exchange, Bolsa de Madrid, Borsa Italiana, Chicago Mercantile Exchange, Copenhagen Stock Exchange, Euronext Amsterdam, Euronext Brussels, Euronext Lisbon, Euronext Paris, Helsinki Stock Exchange, Hong Kong Stock Exchange, Johannesburg Stock Exchange, London Stock Exchange, NASDAQ, New York Mercantile Exchange, New York Stock Exchange, NYSE Amex, Oslo Stock Exchange, SIX Swiss Exchange, Stockholm Stock Exchange, Tokyo Stock Exchange, Toronto Stock Exchange, Wiener Börse, Xetra

…but not in their list with transaction fees. So check! Personally I only have Swiss and British stocks with them.

 

[Jerome]

Can you try again for the comments?

I can't find Japanese titles, even big caps, but that may be because of the test platform.

[dividinde]

Yes, it's all good, I see the comments again :)

 

You're right: I tried to place a purchase order with Sony and Nintendo and Corner wanted me to buy them on the US market. So apparently no purchase possible on the Japanese market!

[Jerome]

Oh, the bad guys! Deception on the merchandise!

Well, I'm still interested in it as a diversification for other markets.

[dividinde]

I tried several times to write an answer in "work less to earn more" without success. I don't understand what the problem is, I'll try again tomorrow. Strange that it works on the forum but not on the site.

[Author]

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